Global economy will contract 3 per cent this year due to coronavirus and shutdowns as part of efforts to mitigate the spread, the International Monetary Fund said on Tuesday in its updated World Economic Outlook.
The prediction marks a massive 6.3 per cent swing off previous estimates from January.
If the pandemic fades towards the end of the year and containment measures can be lifted, the economy will expand 5.8 per cent in 2021, the IMF said, even as it cautioned the situation is still unfolding and there is uncertainty.
The IMF said governments need to implement substantial targeted fiscal, monetary and financial market measures to support affected households and businesses, to help cushion the blow.
Already major developed and emerging economies have stepped up aid to key sectors and to individuals.
The IMF also noted that coordinated action by central banks in recent weeks has helped reduce systemic stress.
The IMF predictions for regions said the U.S. would contract 5.9 per cent this year, while the eurozone would see growth at a negative 7.5 per cent, with Italy hardest hit among major European economies and is expected to fall sharply, by 9 per cent.
China would see growth slow to 1.2 per cent, but shoot up next year to hit a 9.2 per cent expansion. India would grow at 1.9 per cent this year and 7.4 per cent in 2021.
Trade would also be hit hard. Advanced economies would see imports crash lower by 11.5 per cent this year and exports would come in at a negative 12.8 per cent.
